The first five steps we went over are personal areas that you can gather and accumulate quickly. However, if you’re looking to purchase your first property, chances are you will need a loan. Review these steps to help get your paperwork and finances in order to successful navigate through a home loan process.
- Prove history of payments – When you go to apply for a loan, along with your credit score and income, the lender is going to want to see that you have a solid history of consistent payments. This includes paying off credit cards, rent, mortgages, and utilities. Make sure to bring these items along with you to help speed up this process.
- Organize tax documents – All legal and tax documents should be gathered up before you purchase your first investment home. Below is a list of what will definitely be required if you are looking into financing.
- Tax returns from the past 3 years
- Contact information about your landlord of mortgage lender
- Utility bills
- Recent pay stubs
- Statements from your bank accounts and credit cards
- Government identification (i.e., drivers license and social security card)
- Get pre-qualified – If you’re serious about your real estate venture then you’ll definitely need a pre-qualified lender from a bank. This is an informal letter that states you are eligible and will mostly likely receive a mortgage from the bank, if you request to utilize them. This can give you serious financial advantage when looking to purchase a home or making offers.
- Set aside some cash – Many first time real estate purchasers will need to provide an investment deal with some cash. This may even be necessary if you’re only looking to make an offer. This is called ‘earnest money’ and is similar to a security deposit. The next step after putting down earnest money will be to formally secure a loan for a mortgage. The earnest money is then used as a down payment for the home, if you move forward with the process.
- Stay in the loop – If you’re going to become a serious real estate mogul, you’ll need to constantly stay in the loop and be aware of what is happening in your investment area. If you’ve partnered with an agent, they can set you up with an MLS alert for your desired area, and it will notify you immediately when properties become available.
While these steps are only just a few of the necessary requirements to successfully and thoroughly venture in to the real estate market, we promise that if you follow these guidelines you’ll be 10 steps ahead of your competitor!